Correlation Between Hyosung Advanced and Samsung CT
Can any of the company-specific risk be diversified away by investing in both Hyosung Advanced and Samsung CT at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hyosung Advanced and Samsung CT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyosung Advanced Materials and Samsung CT Corp, you can compare the effects of market volatilities on Hyosung Advanced and Samsung CT and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hyosung Advanced with a short position of Samsung CT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Advanced and Samsung CT.
Diversification Opportunities for Hyosung Advanced and Samsung CT
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hyosung and Samsung is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Advanced Materials and Samsung CT Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung CT Corp and Hyosung Advanced is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hyosung Advanced Materials are associated (or correlated) with Samsung CT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung CT Corp has no effect on the direction of Hyosung Advanced i.e., Hyosung Advanced and Samsung CT go up and down completely randomly.
Pair Corralation between Hyosung Advanced and Samsung CT
Assuming the 90 days trading horizon Hyosung Advanced Materials is expected to under-perform the Samsung CT. In addition to that, Hyosung Advanced is 1.44 times more volatile than Samsung CT Corp. It trades about -0.18 of its total potential returns per unit of risk. Samsung CT Corp is currently generating about -0.16 per unit of volatility. If you would invest 15,050,000 in Samsung CT Corp on September 15, 2024 and sell it today you would lose (3,170,000) from holding Samsung CT Corp or give up 21.06% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Hyosung Advanced Materials vs. Samsung CT Corp
Performance |
Timeline |
Hyosung Advanced Mat |
Samsung CT Corp |
Hyosung Advanced and Samsung CT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hyosung Advanced and Samsung CT
The main advantage of trading using opposite Hyosung Advanced and Samsung CT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Advanced position performs unexpectedly, Samsung CT can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Samsung CT will offset losses from the drop in Samsung CT's long position.Hyosung Advanced vs. Solution Advanced Technology | Hyosung Advanced vs. Busan Industrial Co | Hyosung Advanced vs. Busan Ind | Hyosung Advanced vs. Sam Chun Dang |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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